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Buying a house in the USA?

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Buying a house in the USA?
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Title Insurance

Title insurance insures against errors in the title search and guarantees that you and your lender retain financial interest in the property. A title search checks for liens, encumbrances and legal errors, as well as fraud, forgery, missing heirs or divorce proceedings that could affect your rights of ownership, possession and/or use of the property.
The required title insurance only protects the lender, so if the property has a long and checkered history, you may want to take out a separate owner’s title insurance policy protecting yourself. If the property is relatively new, you may be able to lower the cost of the insurance by asking the insurer for a reissue rate if there have been no claims against the title since the previous search was done. If you and the seller are both getting the insurance, you may save money by using the same insurer, who then only has to research the property once for both of you.

Escrow

At closing you may have to put aside money into special escrow accounts to insure that such things as private mortgage insurance (PMI) property taxes and homeowners insurance are paid on time. Federal law limits the amount of escrow “cushion” to two months of payments. Be sure to ask the lender what escrow payments will be required at closing, some companies may waive escrow requirements if you pay more points or a higher interest rate.

Ways to save at closing

Many closing costs are standard and won’t vary from lender to lender, for instance appraisals, credit reports, title insurance, government stamps and recording fees. (The costs may vary but the requirements are standard.) Sometimes referred to as “hard costs”. Others, however, may be eliminated simply by opting out of a service, such as overnight delivery of documents. If a fee seems vague or questionable, ASK. Some mortgage companies include so-called “junk fees” that you can eliminate or reduce.
All mortgage loan payments are due on the first of the month; you can avoid or reduce the prepaid interest due by closing on or near the end of the month.
Remember, you can always negotiate with the seller to have them split or pay outright some of the closing costs, points or fees. This is sometimes referred to as “Sellers Concessions” The real estate agent should negotiate the best possible deal for you on this.

The good faith estimate is required under a law called the Real Estate Settlement Procedures Act. This law also prohibits “kickbacks” among the settlement providers and the act prohibits the property seller from compelling the buyer to use a particular title insurance company. (A law that a buyer should be very aware of.) The elements of the law are enforced but however; do not cover the enforcement for the accuracy of the GFE.

Obtain Loan Approval

Once the signed loan application has been received by the mortgage broker, the loan approval process begins immediately. The loan is passed to the lender or finance provider and the underwriter (sometimes known as “the higher Power”) starts their part of the job. This involves them verifying your credit history, employment history, assets including your banks accounts, stocks, mutual fund, retirement accounts and property valve. Their job is to ensure the validity of your application and ensure that you are trust worthy; you are after wanting to borrow quite a hefty sum of money. To improve your chances of getting a loan approval, make sure you have filled out the loan application completely and honestly. As a “New Arrival” you may find that you scrutinized a little more thoroughly than a US Citizen, please don’t take it personally, you too will become as protective about America as everyone else.

DO NOT make any major purchases such as a car, furniture or another house until after the loan is closed. This will affect your debt to income ratio and could ultimately kill the deal.

Finally, be sure that you can provide a written explanation for any unacceptable late payments, collections for judgment, change of name, location etc. All which can be verified if required.

Close the loan

Closing usually happens between days 25 and 45 of the loan process. Though this process can be longer when there are a couple of countries involved. At the closing, the lender “funds” the loan with a cashiers check, draft or wire to the selling party in exchange for the title to the property. This is the point at which the borrower finishes the loan process and actually buys the house.

You will be required to sign the final loan documents in front of a notary public. Make sure that the interest rate and loan terms are what you were promised as well as the name and address on the loan documents are accurate.

Bring a cashier’s check for your down payment and closing costs if required.
Personal checks are NOT accepted.

Congratulations !
The house is now yours and ready to be called HOME.

Article written and kindly provided by:

Lizzy McNaney-Juster

First National Mortgage Sources
http://www.britsfinanceinusa.com/
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